Why Shoe Prices Go Up In Spite Of Free Hides.

New York Times 100 years ago today, July 21, 1912:
The Domestic Market Is "Protected" by Tariff, Trade Agreement and Machinery Monopoly — Our Shoes One-third Cheaper Abroad.By John Jerome Rooney.
    The retail price of shoes, so we are told from Chicago and Boston, is to go up on or before Sept. 1 next by at least 20 per cent. Shoes now selling for $5 per pair are to be advanced to $6 per pair; other grades to the same extent, or, we are told, if we do not want to pay the extra price we must be "content with an inferior quality of footwear."
    Then there is given to the consumer this further light:

    "We find that since Jan. 1, 1908, the cost of leather has increased 72 per cent." said one manufacturer to-day. "The price of shoes has been raised from time to time to keep pace with this increase in the cost of leather, but another boost to the shoe price is now due.
    "There are many reasons for this increased price of leather, but the popularity of the automobile is one of the principal causes. The average man does not know how many sides of leather are being used to-day in the manufacture of automobiles. The great trouble is that the uses for leather are increasing daily, and the supply of the raw material is decreasing. The large ranges of the West are being cut up into small farms, and the owner is now raising cereals instead of cattle and sheep."

    So far for Chicago. Under a Boston date of July 19 The New York Times has this:

    Although word comes from Chicago that the prices on shoes of all grades are to be raised 20 per cent., no increase in prices is imminent in New England, according to leaders of the industry, chiefly because the advance has already come here, and for the most part in a disguised form. The purchaser has been paying the same amount of money but getting a poorer shoe.
    Elmer J. Bliss, a leading manufacturer, thinks it time that the public was aware of this, and made to understand that to get a really high grade of shoe the higher price must be paid.
    "Manufacturers and retailers," he said to-night, "are at present fooling the public in selling at a real advance. They are selling poorer grades of shoes at what were formerly the highest-grade prices. The advance had to come, for the price of leather has been driven up steadily, but it is time that the public should understand just how things are done."
    Henry F. Hagan, a prominent Boston retailer, confirmed this, and added: "But at that, the public is getting a better value for money invested in shoes than was the case fifteen years ago. The shoe is better made and better finished. The real advance in price and falling back in grade dates from two years ago.
    "As to the possibility of a general advance in prices, I fear there, is no such good news. The retailers ought to get more, but unless the price is run up considerably by wholesalers no sudden jump is probable."
    Charles H. Jones, prominent in the National Boot and Shoe Manufacturers' Association, said he knew of no movement to make a sudden advance in this section of the country.
    "There has been a steady advance extending over a considerable time," he said.

    The most striking statement in the Chicago dispatch is that the cause of the proposed advance is to be found in the increasing use of leather for automobile equipment, and that "the supply of the raw material is decreasing, the large ranges of the West are being cut up into small farms, and the owner is now raising cereals instead of cattle and sheep."
    This claim of a short supply of hides is based upon the idea that the cattle ranges of the West are the only source of supply for our leather manufacturers.
    One of the few good features of the Payne-Aldrich Tariff bill was the placing of hides upon the free list. Under the Dingley tariff hides paid 15 per cent. duty. Consequently the entire world supply of hides is at the disposal of the leather manufacturers of the United States. This supply in almost unlimited quantity may be had and is actually obtained from South America, Mexico, Australia, Canada, and Europe.
    To listen to the cries of distress of the agents of the leather manufacturers one would think there was a famine in the United States hide market, and that the only source of supply was drying up. In passing I would say that putting out false statements in regard to supply in order to prepare the public mind for prearranged combination advances of price is a familiar practice. It is constantly resorted to among the food supply monopolies and associations.
    But what are the facts as to the hide supply?
Last year (1911) the record of importations of cattle hides, dry and green, as given by the United States Bureau of Statistics showed a total of 154,839,449 pounds, valued at $21,667,000. Importations of calf and kip skins, 129,396,000 pounds, valued at over $21,000,000. Buffalo hides weighing over 3,400,000 pounds were imported, and over 11,000,000 pounds of horse, colt, and ass skins came from abroad.
     Yet, in the presence of such enormous importations of hides, not to speak of over 80,000,000 pounds of sheep skins valued at. nearly $10,000,000, we hear a cry of scarcity of hides due to "the large ranges of the West being cut up into small farms," &c.
    What is the explanation of this? It is not difficult. It is to be found ultimately in the duty laid by the tariff on leather, manufactures of leather, and tanned skins. This duty on last year's importations averaged 32.35 per cent., showing total custom collections of only $4,831,142.87. Such a revenue to the Government from such an article as leather and manufactures of leather proves conclusively that the rate of duty is almost prohibitory of importations, and, of course, such importations as do flow over the tariff wall, largely specialties, are increased in price to the extent of the duty.
    This situation has given the opportunity for combination among the chief leather manufacturers. Competition in the finished article being controlled — though not completely in this industry — the advantage of free raw hides does not pass down to the consumer. This is one part of the explanation why the putting of hides on the free list did not reduce the cost of shoes and leather. The finished article was, and is still, "protected" in the domestic market.
    The other part of the explanation is found in the monopoly that controls patented shoemaking machinery, and which holds the large shoe manufacturer substantially in its hands. The United States Government is now suing, to dissolve this combination.
    Thus, while there is unquestionably an abundant supply of hides and raw material available, two groups of traders are in a position to hold back the supply from the market except at the price fixed and dictated by themselves, and to absorb the saving of the former duty on hides.
    The public is then solemnly told that they are using too many automobiles and must pay more for their shoes.
    One week ago a New Yorker walked into a well-known Broadway shoe store with two friends. He said to the salesman: "Show me a pair of shoes like this" — showing the shoes he wore. The salesman showed a shoe identical in every respect, it being a special proprietary make. Having fully satisfied himself and friends of the similarity of the shoes, the New Yorker asked the price.
    "Five dollars," replied the salesman.
    "But," said the customer, "I got these shoes in London a month ago — they are your shoes, the same shoes — and I paid only $3.50. How is that? My friends here would not believe me when I told the price."
    "Yes," said the salesman, "that is the London retail price. The export price makes that."
    Doubtless these shoes will go to $6 in New York in September — because "the farm lands in the West are being cut up," and shoe buyers are using too many autos.